1. Condominium Development 101
Tammy Evans
Marc Kemerer
Adil Darr
September 14, BILD Member Presentation

2. Over 56% of all new construction in Ontario
Over 10,000 existing registered condominiums across Ontario
Creating over 700,000 condominium units

3. Legislative Regime Governing Condominium Development
1. Condominium Act, 1998
Protecting Condominium Owners Act, 2015 (in force by Royal Assent Dec. 3, 2015, but Schedules 1 and 2 not yet proclaimed)
Condominium Management Services Act, 2015
2. Planning Act
3. Ontario New Home Warranties Plan Act
4. Land Titles Act/Registry Act
5. Construction Lien Act

4. 1. Condominium Act, 1998/Reform Legislation
Purpose of the Act/Reform
increased consumer protection
sets up minimum standards for condominium development
accommodates different forms of condominium development
mandates certain requirements through the life span of a condominium - from first sale through construction completion and operation

5. mandated disclosure of key details that impact decision to purchase
provides clarity for purchasers, ease of reference in standardized format of disclosure
balancing act: consumer protection within fairly open market, not intended to unduly interfere in the marketplace, but to address areas of concern

6. Structure of the Act
Part II - mandated contents for written and plan description of project - physical and operational design, services, restrictions and permissions (s.7 and s.8) to create a condo
Part IV – condominium corporation setup authority
Part V – Mandatory disclosure requirement for sale/lease of units
what documentation need to go to market?
10 day cooling off – right of rescission for purchaser (calendar) days from later of receipt of (a) disclosure statement and (b) fully executed agreement of purchase and sale (s.73)

7. Budget statement for first year of operation (s.72(6))
material change – s.74 – “a change or series of changes that a reasonable purchaser on an objective basis would have regarded sufficiently important to his decision to purchase” – ie. would not have purchased
revised disclosure or “notice” to be delivered within a reasonable time or clock starts when purchaser became aware
obligation to complete the project and turn it over to unit owners (s.78)

8. Part IX - enforcement/self help
Part VI – operation, collection/use of common expenses, reserve fund, repair and maintenance, changes, insurance
Part IX - enforcement/self help
mandatory mediation and arbitration for certain disputes (s.132)
court application to appoint inspector (s.130) or administrator (s.131)
compliance order (s.134)
oppression remedy (s.135)
administrative fine/penalty (s.137) max $100,000 corporate/$25,000 individual
Note: Reform amendments coming for dispute resolution process

9. Hierarchy of Regulation of Condominium Developments
The Act, Reform legislation and regulations and all other applicable statutory requirements (and the courts)
registered declaration and condominium plans (description)
registered condominium bylaws
any registered agreements (as authorized by bylaw or in the declaration, s.98 Agreements)
condominium Rules

10. Compliance and Enforcement
duty of care - Board of Directors and officers held to statutory duty of care in exercising duty to manage affairs of the condominium (s.37)
compliance order – any condominium corporation/owner/ mortgagee/occupant has authority to enforce compliance through the courts (or presumably Condo Authority, when in place and operational) with the Act, declaration, bylaws, rules, shared facilities agreement (provided mandatory mediation and arbitrator is exhausted first, where applicable) (s.134)
Act prevails – cannot contract out of the Act (s. 176)

11. “Condominium Documents” or “Disclosure Book”
Index
Table of Contents (to Disclosure Statement)
Disclosure Statement
1st year Budget and Schedule of Monthly Common Expenses
Proposed (or registered) Declaration
Proposed (or registered) Bylaws
Proposed (or actual) Rules
Proposed (or actual) Insurance Trust Agreement (if any)
Proposed (or actual) Condominium Management Agreement
Proposed (or registered) Reciprocal Agreement
Proposed Agreement and Undertaking (if any)
Proposed building footprint/site plan/floor plates (recommended)

12. Documentation that legally creates the condominium
Declaration
Written description of the project
Contents mandated by s.7 of the Act and O. Reg. 48/01, s.5
Mandated schedules
A - legal description of the lands and easements necessary for operation/access/support
B - mortgagees’ consent to registration
C – description of unit boundaries
D - each unit percentage of common interest in the whole
E - common expenses breakdown
F – description of exclusive use areas
G – confirmation of completion of minimum requirements for construction completion (architect and/or engineer sign) (see also O.Reg 48/01, s.5(8) and s. 6)
H, I, J, K, L- as necessary for alternative condo forms

13. Description (aka: the condominium plans)
contents mandated by the Act (s.8) and Reg 48/01, s.9
describes by drawing boundaries of units and extent of common elements of the condominium property
What to ensure is included from developer’s perspective:
consistency with planning approvals – eg. connections to public road, access points, zoning/site plan compliance, parking and locker requirements, bicycle parking, easements, etc.
extent and relationship of boundaries to neighbour property/unit (particularly important for mixed use projects)
updated from architectural changes (working drawings) along the way (always keep surveyor up to date with architectural changes)

14. What do I need to go to market?
an experienced primary project team!
architect
surveyor
condominium manager
condominium lawyer
marketing/sales professionals
construction (lead general contractor/construction manager)
site specific consultant: eg. heritage/environmental/traffic
master form Agreement of Purchase and Sale (incentives/other schedules)
Disclosure Book/Condominium Documents
registration of Vendor and Builder and project enrolled with Tarion (conversion projects to come in future)

15. Steps to Registration
Lands in Land Titles Absolute Plus and construction substantially completed
development applications (site plan, s.37, development agreement) in place and Draft Plan of Condominium Approval (DPA) issued, environmental, groundwater discharge issue addressed (Toronto)
clearance of site plan/development agreement/DPA conditions
grant/creation of any servicing or other easements required
final measure by surveyor
preparation of “as built” drawings
occupancy permits issued
LRO preapproval of condominium plans/declaration (separate process)
architect/engineer sign off Schedule “G” to declaration
submission to LRO for registration

16. Alternative Forms of Condominium
Non-Residential /Mixed Use /Stacked/Hybrid Uses
Common Element Condominium (Part X)
(includes freehold parcels of tied land (POTL))
Phased Condominiums (Part XI)
Vacant Land Condominiums (Part XII)
Leasehold Condominium (Part XIII)
Condominium Conversions
protection of tenancy rights (s.4(2) and s.4(3))
watch for local policies and restrictions
coming soon under certain Tarion warranties

17. SAMPLE: Vacant Land Condo

18. SAMPLE: Common Element Condo

19. Strata Plans What are they and when must these be used?
used to define the extent of a particular component (both horizontally and vertically) and easements
three dimensional plans
illustrates both horizontal and vertical layers
needed where carving up space both vertically and horizontally (e.g. stacked mixed use with shared building servicing areas) and to illustrate and describe shared use areas

20. assists in describing by drawing the extent of the ownership/easement part on the plan
best to define via physical/structural – eg: face of wall; centreline component of floor
operational considerations:
servicing agent doesn’t care when the legal part ends
control vs. use
shared facilities
cost allocation impact
Reform changes to come

21. SAMPLE: CONDO STRATA PLAN

24. Important Obligations to Note
Agreement of purchase and sale is not binding if disclosure does not comply with Act’s requirements
obligation to notify purchasers of material change
rescission right arises for material change – whether notice provided or not
declarant on the hook for first year budget deficit – make budget reasonable
developer obliged to proceed diligently to registration and closing
Tarion addendum and Statement of Critical Dates mandatory and to be updated post roof completion to firm occupancy date form (watch use of early termination conditions)
watch Tarion notice requirements – insufficient notice triggers compensation to purchaser – eg. strike delay notices

25. Condominium Reform Two new statutes:
1. Protecting Condominium Owners Act, 2015 (PCOA) (Schedule 1)
omnibus-type bill
in force by Royal Assent Dec. 3, 2015
Schedules 1 and 2 not yet in force (requires proclamation)
amendments to Condominium Act, 1998 and various other statutes
establishes Condominium Authority to oversee education, dispute resolution, condominium registry
governs disputes primarily between condo boards and owners

26. 2. Schedule 2 to PCOA – Condominium Management Services Act,
2. Schedule 2 to PCOA – Condominium Management Services Act, (CMSA)
not yet in force – requires proclamation
establishes licencing authority (Condominium Management Licencing Authority) to administer CMSA
licencing and regulation of property managers and property management providers
both Condominium Authority and Licencing Authority will be provincial administrative authorities – not for profit, self funded (after initial startup) independent from Province, but oversight by Auditor General

27. Robin Dafoe recently named as interim executive leader of both Condominium and Licencing Authorities
Status of Legislature (regulatory drafting)
Status of governance structure and appointments

28. Planning Act Planning Context Policy/legislative framework
Planning instruments and new condominiums
Planning instruments and condo conversions
Conclusions on planning instruments

29. Context
differentiate condominiums from other developments by their specific tenure
still developments shaped by land use planning considerations from the outset
approach the development as would any other development, ensuring compliance with the hierarchy of planning instruments: provincial statutes/policies followed by local official plans, zoning standards and site plan requirements
make sure all applications are complete

30. municipality will be looking to obtain benefits from the development (parkland dedications, road widenings, s. 37 benefits) and servicing improvements necessary for the development
carefully review conditions of draft plan approval and other development approvals
conversions – are there official plan policies in effect that regulate/restrict conversions?
key = ensure that all municipal demands/requirements are reasonable (related to the development) and within the jurisdiction of the municipality

31. Policy/Legislative Framework
the creation of a condominium involves two types: new construction or conversion of an existing building
different standards in terms of which planning instruments may apply
to understand the planning requirements behind condominium creation need to review together the Planning Act and the Condominium Act, 1998

32. Provincial Interest
s. 2: decisions need to have regard for matters of provincial interest set out in Planning Act (conservation of resources, full range of housing, protection of public health and safety, etc.)
s. 3: decisions need to be consistent with the Provincial Policy Statement policies

33. Provincial Policy Statement 2014 (PPS)
policy 1.4, Housing, is the main policy that applies with respect to the creation of residential condominiums
requires the provision of a range of housing types and particularly the provision of affordable housing
is your development consistent with this goal? is it consistent with other policies i.e. intensification (1.1.13), the use of existing infrastructure (1.6)

34. Official Plan/Zoning Conformity
s. 9(3) Condominium Act, 1998: a description cannot be registered without the approval of the approval authority
condominium proposal must meet current official plan policies and zoning performance standards
basis for review no different than any other development application

35. Draft Plan of Condominium
s.50 of Planning Act establishes a general prohibition on subdivision of land except by consent or through an exemption
s.9 of Condominium Act, 1998, states that s.50 of the Planning Act does not apply to dealings with whole units (and their common interests) in condominiums

36. draft condominium plans are subject to sections 51, 51
draft condominium plans are subject to sections 51, 51.1 and 52 plan of subdivision provisions (9(2) of the Condominium Act, 1998)
s.51(17) provision of draft plans
s.51(24) criteria: regard must be had to conformity with official plan and effect on matters of provincial interest

37. s.51(25) provides the approval authority with the ability to impose conditions on the approval of a plan of condominium
conditions are to be “reasonable”, having regard to the nature of the development
specific conditions include parkland and highway/right-of way dedications

38. s. 41 sets out the conditions that can be requested through site plan control
additional layer of regulation often required through draft plan approval
s. 41(4) required to provide drawing/plans
s. 41(7) conditions of approval: loading, parks, grading, landscaping, maintenance etc.

39. Planning Instruments and New Condominiums
Timing of compliance with zoning
municipality will require compliance with zoning prior to final approval
degree of risk in proceeding from the start with a condominium application will depend on support for proposal
recommended to seek necessary zoning approvals first prior to filing an application for condominium approval
does not preclude preparing the plan of condominium application or going to market

40. Timing of compliance with site plan
the same scenario applies to the site plan as to zoning by-law compliance
typically required to fulfill site plan conditions as part of the draft plan approval
compliance with the site plan itself will have to occur prior to registration as the building will have been built before registration of the condominium occurs

41. Section 37 Benefits
Municipality may require the provision of “facilities, services of matters” in exchange for approving increases in height and density
Have to have an official plan policy in effect relating to such authorization
Large, tall condominium buildings a perfect target for such “let’s make a deal” planning
very political and can involve large sums

42. OMB (generally): should have a real and demonstrable connection between the public benefits and the planning approvals
Look at what the impact is and the resulting needs, streetscape improvements, local pool and park upgrades: 45 Charles St E, Toronto
Ensure that the “ask” is related to the development and reasonable (unless politics is more practical)

43. New approaches to condominium development: parking
426 University Avenue, City of Toronto: developer proposed no parking for a condominium building with 315 units located on a major arterial route well served by transit
staff recommended refusal but Council approved project with nine parking spaces

44. Larger units – OPA
Toronto Official Plan Amendment to Encourage Development of Units for Households with Children
City staff recommended OPA to:
include the term “dwelling units suitable for households with children” in official plan policies requiring the provision of a full range of housing; and
introduce a new area specific policy to require that any new downtown developments containing 100 or more dwelling units construct 10% of those units as dwelling units containing three or more bedrooms (may contain less than three bedrooms if constructed in such a manner that they can be converted to three or more bedrooms)

45. Proposed OPA met with considerable opposition from the development sector on the basis that:
there is no market demand for such units, and
they are not affordable for average families with children
While OPA has not been adopted, the policy objective is being realized through the approvals process as part of the negotiations process – not actively resisted by developers

46. 4. TTC Metropass
Program required developers to provide TTC Metropass to first occupants for one year in designated growth areas
In face of overwhelming objection by the development industry (BILD), City Council rescinded the program
did not meet objective of promoting transit and was arguably illegal

47. Municipal Draft Plan Approval Requirements
Standard conditions vs. site specific conditions
Typical standard conditions:
based on type of condominium (standard, phased, common
element, commercial, mixed use, conversion)
fulfillment of site plan/development agreement requirements
Road dedications complete
clearance from utilities, Canada Post
clearance from school boards (as applicable)

48. Site specific conditions (flows from planning review):
based on demand on and proximity to public roads, conservation areas, site servicing, transit, schools, traffic
environmental assessments (Phase One and Phase Two ESA, Record of Site Condition)
Heritage requirements
restrictions, purchaser warning statements

49. Planning Instruments and Condo Conversions Case Law
OMB: to be granted weight, a conversion policy must be part of the official plan policies
Critical to municipalities is protection of rental units – tied to CMHC vacancy rate
Courts: look at the purpose and wording of the official plan policies on conversion - a municipality is entitled to include the adequate supply of rental housing in such policies
Are there policies on meeting current zoning standards - OMB dismissed a condominium conversion proposal in Windsor on the basis that the proposed parking was inadequate for the conversion per the Official Plan policies

50. Compliance with updated zoning regulations
given that there is no change in use, but only a change in tenure, arguably the development will be grandfathered in terms of the zoning standards
will likely depend on the individual application: are any changes proposed to the development that trigger the requirement for current standards
do the condominium conversion policies require such compliance (Burlington Official Plan policy 2.3.2(f)(ii))?

51. such Official Plan policies provide a reasonable basis for the requirement
focus of municipal policies, if any, generally on housing policy (i.e. vacancy rates) rather than built form, which may limit the ability to require compliance to updated zoning regulations

52. Compliance with updated site plan
an interesting question since site plan relates to the “usability” of the site (s. 41 of the Planning Act)
a case can be made that the change in tenure will result in an increased use of the site (owners have higher rates of car ownership, etc.)
may therefore have to be considered on a case by case basis
does the wording of municipal conversion policies address this issue?

53. Municipal Act, 2001
s allows a municipality to pass by-laws to prohibit/regulate the demolition/conversion of residential rental properties
rarely used, but a potential source of leverage for municipalities
City of Toronto Municipal Code Chapter 667, Residential Rental Property Demolition and Conversion Control
Barrie has been considering such a by-law

54. Conclusions on Planning Instruments
approach condominiums as with any other development
ensure compliance with Official Plan policies, zoning standards and site plan requirements or that compliance can be obtained through the approvals process
be wary of what the municipality is seeking as conditions of approval, ensure the benefits requested are reasonable and within the jurisdiction of the municipality

55. Ontario New Home Warranties Plan Act (TARION)
regulates all new home construction in Ontario
all builders and vendors must be registered (s.6)
vendor and builder responsible for warranties
mandates construction completion, inspection and reporting requirements/standards
Construction Performance Guidelines, Bulletin 19 Design and Field Review Reporting
fit and finish guidelines without tolerances
common elements Construction Performance Guidelines
retain independent consultant to conduct Bulletin 19 inspection (for any Part 3 OBC Condo)

56. Tarion administers the warranties program
1, 2 and 7 year warranty for all new home construction
all condominium units must be enrolled with Tarion prior to excavation
does not yet cover or regulate condominium conversions (changing in 2017)
mandatory registration: posting of security to cover
deposits
construction completion warranties
level of security based on risk assessment (BB 28)

57. Builder Bulletin 28
Assess technical ability
Financial strength
History of applicant
Under review in 2016

58. A. Underwriting Guidelines
Builder Bulletin 28 scoring
Size points
Tenure points
Business/Technical 20 points
Financial Strength 50 points
100 points

59. B. Condominium Types
Type A – Project falls under Part 9 of OBC and is a lot line condo Type B – Project falls under Part 9 of OBC and is not a lot line condo (eg. townhouses) Type C – Project falls under both Part 9 & Part 3 of the OBC (eg. stacked towns with underground parking, subject to Bulletin 19) Type D – Project falls under Part 3 of OBC (highrise - 4 floors and up, concrete construction)

60. C. Technical Assessment
For projects under Part 9 OBC - Builder Education core competencies required before application made for new registrations
For projects where any component of project falls under Part 3 OBC - Tarion conducts meeting to assess technical ability

61. D. Type C/D Technical/Financial Assessment
Meeting with developer to assess financial and technical capabilities
Review/discuss Budgets and financing (quality of lender, types of lenders)
Assessment of project team (ie- in house or external parties)
Review of Builder Bulletin 19

62. E. Conditions of Registration
Based on assessment, conditions imposed:
Limit on size and complexity of projects
type of security
Builder being used for project (particularly for highrise)
Financing Commitment required prior to construction

63. F. Security Requirements
Forms of security
Surety Bond
Letter of Credit
Cash
Deposit Trust Agreement (DTA)

64. G. Release of Security - General
Track record taken into consideration (number of conciliations, etc.)
For first time Type C and D (i.e. Bulletin 19 projects) developer’s security is maintained for 2 years from condo registration
For Type C and D developers with a track record security release we use the guidelines in Builder Bulletin 28

65. G. Release of Security - under BB 28
For all types security reduction is triggered when condo is registered and evidence of minimum of 50% title transfers are received
Initial reduction is based on the risk assessment amount
For types A and B (Part 9 OBC), a subsequent reduction occurs one year after condo registration
For types C and D (Part 9 & Part 3), reduction can occur when Final BB 19 Report is received
Will consider performance audit as well

66. H. Warranties - One-Year Warranty
Two sets of statutory warranties
Unit warranties – starts from occupancy closing/date of possession
common elements – starts from date of registration
Warranties apply to:
new construction “completed”
think “bumper to bumper”, not just essential elements
violations of OBC
unauthorized substitutions
Schedule C to Declaration is important here

67. H. Warranties - Two-Year Warranty
Provides protection against:
Health & Safety violations of the Ontario Building Code
Defects in the electrical, plumbing and heating distribution systems
Defects allowing water penetration
Defects in exterior cladding, balconies, bricks, siding derailment

68. H. Warranties – 7 Year Warranty
Protects against Major Structural Defects including:
Defects in work or materials that result in the failure of a load bearing part of the Home’s structure, or materially and adversely affects its load bearing function;
Defects in work or materials that significantly and adversely affect the use of the building as a home
eg. mould – makes it unlivable - but must be a result of a defect in construction
eg. plastic vents on furnaces lets in carbon monoxide
eg. Dominion concrete foundations crumbling
eg. wall cave in – 2nd floor ends up in basement

69. 4. Land Titles Act/Registry Act
Different registration systems across Ontario (transition from paper system to automated, Registry and Land Titles)
Regulates form and minimum content of documentation permitted to be registered/deposited for certification and reliance
Underlying lands for condominium registration must be under Land Titles Absolute system (or Registry where no LTA)
Condominiums must go through the land registry office pre-approval process before registration can occur
LRO review of declaration and description for compliance with registration requirements
should be 10 days max turn around with comments to lawyer/surveyor
Municipality forwards signed description (condo plans) to LRO
architectural and structural as builts go directly from surveyor to LRO; executed declaration and fees typically go directly from lawyer to LRO

70. 5. Construction Lien Act
s.33.1 Notice of Intended Registration of Condominium
effective July 1, 2011 – do comply!
requires “owner” to publish Notice in a construction trade newspaper before submission for (final) approval
deadline to publish: no earlier than 5 days and no later than 15 days before submission of plans to Municipality for (final) approval
intended to provide early notice to trade contractors
prescribed form and contents (Form 24, O.Reg. 174/11)
list of contractors who serviced the site in last 90 days
imposes liability on owner to trade(s) with a valid lien who has suffered damages as a result of lack of proper notice

71. Recap: Legislative Regime Governing Condominium Developments
1. Condominium Act, 1998 and Reform Legislation (pending proclamation) 2. Planning Act 3. Ontario New Home Warranties Plan Act 4. Land Titles Act/Registry Act 5. Construction Lien Act

72. Useful Reference Materials:
Condominiums in Ontario: A Practical Analysis of the New Legislation, Herskowitz & Freedman (2001)
The Condominium Act: A User’s Manual, Loeb (2010)
Government of Ontario (Service Ontario) Land Registration Bulletins and Guidelines/ Checklists
Tarion Website and Builder Bulletins
Construction Performance Guidelines
Builder Bulletins eg. Bulletin 19 Design & Field Review Reporting

73. Questions and Answers

74. Thank you for listening.
Tammy Evans
Marc Kemerer
Adil Darr